Arbitration clause survives partnership dissolution where contract is assignable and successor in interest remains bound by agreed appointment method.

An arbitration clause in an assignable contract continues to bind an assignee or successor in interest unless it is clearly limited to the original parties. Dissolution of a partnership firm, by itself, does not extinguish contractual rights and obligations under an agreement to sell, including the agreed mechanism for appointment of the arbitrator. The clause was construed pragmatically to preserve the efficacy of the contract, and the respondent, as successor to the firm's assets and liabilities, could act under the appointment mechanism. The challenge to the arbitration arrangement therefore failed.

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Issues: Whether the arbitration clause and agreed method of appointment of the arbitrator survived the dissolution of the partnership firm and the transfer of its assets and liabilities to the respondent.

Analysis: The dissolution of the partnership and the respondent's succession to the firm's assets and liabilities did not extinguish the contractual rights and obligations arising under the agreement to sell. The contract was treated as assignable, and the arbitration clause was held to bind the actual parties and their successor in interest. The agreed mechanism for appointment of the arbitrator was not regarded as having failed merely because the original firm had been dissolved, and the clause was construed pragmatically so as to preserve efficacy of the contract.

Conclusion: The arbitration agreement survived, the respondent could act under the contractual appointment mechanism, and the petitioner's challenge failed.

Ratio Decidendi: An arbitration clause in an assignable contract binds the assignee or successor in interest unless the clause is clearly confined to the original parties, and dissolution of a partnership does not by itself terminate the agreed appointment mechanism.

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